Jeff Peterson didn’t start with investors, privilege, or a fallback plan. At 17, he jumped into business and never looked back. On this episode of Leaders and Legacies, Jeff breaks down the leadership lessons behind building a $150 million real estate project from the ground up. What started as a cash-flowing trailer park evolved into a 316-unit, mixed-use development—thanks to years of patience, calculated risk, and grit.

Jeff reveals how starting small taught him discipline. From driving a school bus in high school to running his family’s upholstery shop without knowing the craft, every challenge refined his resilience. He also shares a sharp strategy: always charge your own business market rent. If it can’t afford that, it doesn’t belong there.

Leadership, to Jeff, is about vision, but also survival. He teaches why speculative investing is dangerous for beginners and why long-term thinking always wins. This episode is a masterclass in entrepreneurial endurance, strategic property ownership, and staying grounded while scaling big.

Want to learn more about Jeff Peterson's work? Check out their website at https://petersonproperties.co.

Connect with Jeff Peterson on LinkedIn at https://www.linkedin.com/in/jeff-peterson-b4a4534/.

Key Points with Time Stamps

• 00:01:04 – Jeff Peterson’s backstory and introduction to real estate at age 17

• 00:06:05 – The origin and scope of Peterson Station, a $150M mixed-use development

• 00:07:31 – “If I knew what I didn’t know, I would’ve never started”—on diving into big projects

• 00:10:53 – Why second developers often profit more than the pioneers

• 00:14:13 – Why quick flips fail: Jeff’s case for long-term real estate investing

• 00:15:27 – Real estate is forgiving—if you can afford to wait

• 00:18:00 – Jeff’s approach to owning property and leasing to his own businesses

• 00:19:04 – Why you should charge your business market rent

• 00:21:19 – How owner-occupancy can improve your loan terms with banks

• 00:22:29 – Hard lessons: Running a shop with zero experience and making it work

• 00:29:07 – Critical advice: Borrow everything before quitting your job

Transcript

00;00;00;00 - 00;00;30;20
Craig Andrews
I was in a coma for six weeks while the doctors told my wife I was going to die. When I woke up, she told me the most fantastic story. My team kept running the business without me. Freelancers reached out to my team and said, we will do whatever it takes. As long as Craig's in the hospital. I consider that the greatest accomplishment in my career.

00;00;30;23 - 00;00;51;10
Craig Andrews
My name is Craig Andrews and this is the Leaders and Legacies podcast where we talk to leaders creating an impact beyond themselves. At the end of today's interview, I'll tell you how you can be the next leader featured on this show.

00;00;51;10 - 00;01;04;23
Craig Andrews
Today I want to welcome Jeff Peterson. He is a seasoned entrepreneur and real estate investor based in Kerry, North Carolina. Some familiar ground for me going back to NC state.

00;01;04;23 - 00;01;22;23
Craig Andrews
Jeff is the author of Are We There Yet? A Guide to Conquering Every Twist and Turn on the Journey to success. And you know, as I was talking to Jeff in the green room, I just I was really excited about getting started with this because, you know, anybody it has a business.

00;01;22;23 - 00;01;32;05
Craig Andrews
We have the tendency to look at the guy at the next business over and over and just think they have it all figured out. And, you know, it can be sometimes frustrating. And,

00;01;32;05 - 00;01;41;06
Craig Andrews
I think Jeff's story is going to be interesting. It, you know, he didn't build his portfolio with big investors.

00;01;41;06 - 00;01;42;21
Craig Andrews
And he started at 17

00;01;42;21 - 00;01;43;03
Craig Andrews
with,

00;01;43;03 - 00;01;44;25
Craig Andrews
no parachute.

00;01;44;26 - 00;01;51;14
Craig Andrews
He just had to find a way to make things work, support himself and support others. And since then,

00;01;51;14 - 00;01;53;16
Craig Andrews
he's built out a,

00;01;53;16 - 00;01;56;12
Craig Andrews
portfolio worth multiple millions. And,

00;01;56;12 - 00;01;59;22
Craig Andrews
not only that, he's quite the athlete. Runs.

00;01;59;22 - 00;02;07;28
Craig Andrews
Ran eight Boston Marathons, numerous Ironman Spartan races, and many others. Jeff, welcome.

00;02;08;00 - 00;02;11;21
Jeff Peterson
Well, thank you for having me. I really appreciate you putting me on your show. And,

00;02;11;21 - 00;02;13;26
Jeff Peterson
I enjoy talking to you in the green room as well. So,

00;02;13;26 - 00;02;17;27
Jeff Peterson
that that was interesting to talk to, and hopefully we can just keep it going. So, so

00;02;17;27 - 00;02;20;13
Jeff Peterson
very nice. Very nice. Greg. Thank you.

00;02;20;15 - 00;02;27;10
Craig Andrews
Well, and, you know, it's funny how how things go when, you know, we were talking about this when,

00;02;27;10 - 00;02;30;18
Craig Andrews
the information I was given, I was given a LinkedIn account,

00;02;30;18 - 00;02;33;28
Craig Andrews
or LinkedIn profile of somebody who lived in and,

00;02;33;28 - 00;02;44;29
Craig Andrews
Minnesota. And I'm hearing you talk about North Carolina, specifically East Carolina, you know, like East Carolina University. I'm like the same guy in Minnesota, even though that ECU exists.

00;02;45;01 - 00;02;49;08
Craig Andrews
And, I mean, it's a great school, but it's just,

00;02;49;08 - 00;02;55;07
Craig Andrews
and so in a beautiful part of North Carolina, but not a part of North Carolina, a lot of people go.

00;02;55;09 - 00;03;08;08
Jeff Peterson
That's true. So, of course, growing up in eastern North Carolina, ECU was kind of like the big school. So there's ECU Carolina and state, right. So you're you're pretty much going to go to one of those three. And if not that you're going to go to App state.

00;03;08;08 - 00;03;12;12
Jeff Peterson
So East Carolina was the closest, to where I lived, right.

00;03;12;14 - 00;03;26;21
Jeff Peterson
And that was the one that I was. My sisters went there. So we always go there to the games. And so you became a fan just because of that. But also, I was a big state fan as well. So, you know, you kind of anybody in state you like those schools. Yeah.

00;03;26;24 - 00;03;27;21
Craig Andrews
Yeah. It's

00;03;27;21 - 00;03;31;13
Craig Andrews
well and I went to state, which was a very, very good school.

00;03;31;13 - 00;03;38;25
Craig Andrews
Changed a lot since I was there. But now you grew up, you said you grew up near Camp Lejeune.

00;03;38;27 - 00;03;57;10
Jeff Peterson
I did, I grew up in Richlands, actually. So Richlands is in Onslow County, which is about, what, 20 miles from campus. So, next, it's next. Next to Jacksonville. Richlands is a farming community. And so that's where I grew up. I wasn't a farmer, but I worked in tobacco before. And,

00;03;57;10 - 00;04;04;12
Jeff Peterson
I'll tell you the thing about working in tobacco as a kid, you quickly realize that is not what you want to do with your life.

00;04;04;12 - 00;04;13;03
Jeff Peterson
You're like, you know what, I better. I better figure out something. Cause I don't want to be cropping tobacco. You know much more in these hot summers. So it's,

00;04;13;03 - 00;04;20;02
Jeff Peterson
It's not the best way to make a living. But it's good for that. It's good for that 1 or 2 summers, and that's about it. Yeah.

00;04;20;04 - 00;04;29;10
Craig Andrews
Well, and and of course, you know, I was stationed at Cherry Point, which is in Havelock, and it's wild Havelock and Cherry Point here.

00;04;29;10 - 00;04;36;13
Craig Andrews
Havelock and Jacksonville couldn't be more different. There's just a different vibe in the air when you drive through town.

00;04;36;16 - 00;04;39;11
Jeff Peterson
Yeah, I would, I would think the same thing there.

00;04;39;14 - 00;04;49;19
Craig Andrews
Yeah. But it's. Yeah, it gets complicated. So as somebody who worked in the tobacco fields, I've got to ask you about a historic tobacco food.

00;04;49;19 - 00;04;52;13
Craig Andrews
What is your favorite barbecue?

00;04;52;16 - 00;04;55;07
Jeff Peterson
Eastern North Carolina barbecue has to be right. Right.

00;04;55;07 - 00;04;56;15
Craig Andrews
Which one?

00;04;56;17 - 00;04;57;13
Jeff Peterson
Well, I like,

00;04;57;13 - 00;05;10;23
Jeff Peterson
smithfield's is good, but that's kind of generic. Right. So that that wouldn't be my favorite. My favorite would probably be Peet's in in, Aden. So I don't even know if they're still there anymore. But it's right outside of Greenville on the way to,

00;05;10;23 - 00;05;12;11
Jeff Peterson
Jacksonville.

00;05;12;14 - 00;05;17;09
Craig Andrews
Okay. Yeah, there was one in Goldsboro that I used to stop at, and I forgot the.

00;05;17;11 - 00;05;24;25
Jeff Peterson
Name that I think I know which one you're talking about, but I'm trying to be. There's bees in in Greenville. That was good as well. But,

00;05;24;25 - 00;05;33;22
Jeff Peterson
you don't find too much barbecue places around here. Not not not real ones. There is one right on Chatham Street heading towards NC state. And,

00;05;33;22 - 00;05;37;04
Jeff Peterson
the name of that, it escapes me, but it's very good.

00;05;37;07 - 00;05;38;23
Craig Andrews
Yeah. I've eaten there.

00;05;38;23 - 00;05;50;03
Craig Andrews
I would say stay in Greensboro is a really good one. So if you ever, ever in Greensboro. That's right across the street from the Coliseum. Yeah. So. Well, cool. And so,

00;05;50;03 - 00;05;52;01
Craig Andrews
how did you,

00;05;52;01 - 00;05;58;20
Craig Andrews
how did you get started? I mean, just give people focus. Your biggest project that you're working on right now,

00;05;58;20 - 00;06;01;17
Craig Andrews
you're wrapping up, I think, is Peterson Station.

00;06;01;20 - 00;06;01;24
Craig Andrews
That's,

00;06;01;24 - 00;06;05;20
Craig Andrews
And what is give us a rough description of what that property is.

00;06;05;23 - 00;06;23;26
Jeff Peterson
Well, it's it's like Trump Towers, but not like that. Actually, it's nothing like that. It just has his notation. It has my name on it, not his name on it, but basically as an a work for Trump. So I'll put Peterson on it. Actually, it wasn't my idea. So all joking aside, what it was, it's,

00;06;23;26 - 00;06;24;26
Jeff Peterson
mixed use.

00;06;24;29 - 00;06;30;07
Jeff Peterson
So it's 316 apartments and 47,000ft of retail. And,

00;06;30;07 - 00;06;45;17
Jeff Peterson
to do that, I had to assemble nine different pieces of property. One of them that I owned originally and the one that I owned originally was an old trailer park. And when I say old trailer park. It was an old trailer park. And I bought it 25 years ago.

00;06;45;19 - 00;06;48;13
Jeff Peterson
Yes, it was 25 years ago. And,

00;06;48;13 - 00;07;02;06
Jeff Peterson
it was just great location. And I bought it because it cash flowed some, but I knew it was going to be something else eventually. And then long story, I wound up buying all the neighbors around, but that took,

00;07;02;06 - 00;07;06;11
Jeff Peterson
I didn't do that for a long time. And when I did do it, it didn't take that long to do it.

00;07;06;14 - 00;07;12;15
Jeff Peterson
But, I bought all the neighbor neighboring property so I could put that big property together.

00;07;12;18 - 00;07;17;15
Craig Andrews
Wow. And he said $150 million project.

00;07;17;17 - 00;07;31;19
Jeff Peterson
Yeah, yeah, it's it's it's it's a lot. I mean, it it it's one of those that and I say this about many things. I'm sure a lot of people say this about their business to if I knew what I didn't know, I would have never started.

00;07;31;19 - 00;07;35;07
Jeff Peterson
Yeah. Never try to tackle that. I mean, it was way, way out of my league.

00;07;35;07 - 00;07;52;22
Jeff Peterson
I mean, it was just. But it it really was so doing that I, you know, I just had this thing. Look, I can do it. I mean, they did it right down the street. Someone else did it. I can do it. But there's a big that's a huge leap. You know, when I'm talking to the bankers, I'm like, look, the math is still the same.

00;07;52;27 - 00;08;01;22
Jeff Peterson
I just moved a decimal point. That's it. It's the same thing, you know? But bankers don't look at it like that, do they? Not really. So,

00;08;01;22 - 00;08;11;19
Jeff Peterson
it's not really the same thing. And there's a lot of there's so many twists and turns on that project. And it took me way, way over ten years to, to get it to where it is right now.

00;08;11;22 - 00;08;16;11
Jeff Peterson
Once I started. So Covid hit and there's a lot of stuff that happened in the background, but,

00;08;16;11 - 00;08;21;26
Jeff Peterson
yeah, it was it was not a, it was not a straight linear path on that project either.

00;08;21;28 - 00;08;24;04
Craig Andrews
But so is

00;08;24;04 - 00;08;29;02
Craig Andrews
and I don't know, for a property that size, you use the term SEO. Do you have a SEO for the property?

00;08;29;04 - 00;08;34;07
Jeff Peterson
Yeah. You have to get a certificate of occupancy. Is that is that what you're. Yeah, yeah. So there's actually,

00;08;34;07 - 00;08;50;15
Jeff Peterson
the way they do it on a property like this is they'll do several conditional certificate of occupancy. So there's seven different buildings, and they'll give you a temporary SEO on the first two. And before they'll give you another one, you have to finish this part of the road, or you have to put in the traffic light or you have to.

00;08;50;17 - 00;09;06;05
Jeff Peterson
So there's a lot of things that the town will say, okay, we see where you've got this and we see where you're making progress and we know you need to start generating income. So we'll let you have this. But before we'll give you the certificate of occupancy on building number three, you're going to have to take this step.

00;09;06;07 - 00;09;09;04
Jeff Peterson
So so they are pretty good to work with that way.

00;09;09;06 - 00;09;11;27
Craig Andrews
Yeah. So is it complete?

00;09;11;27 - 00;09;13;22
Craig Andrews
Where does it stand?

00;09;13;24 - 00;09;20;25
Jeff Peterson
The residential is complete. The clubhouse parking, everything's in there. The road improvements have all been done.

00;09;20;25 - 00;09;29;16
Jeff Peterson
The last part is the up fits on the retail. So we're started working on those right now. So six months, they'll be. Everyone will be in there.

00;09;29;18 - 00;09;31;22
Craig Andrews
Wow. That's good.

00;09;31;22 - 00;09;36;20
Craig Andrews
And so then do you still have, like, construction loans that have to be converted at some point?

00;09;36;22 - 00;09;42;03
Jeff Peterson
Yeah. Yeah, yeah. So I worked this one when I finally when it finally came down, I worked with a,

00;09;42;03 - 00;09;48;25
Jeff Peterson
developing partner. Developing partner is a big outfit. They took the construction loan and then we swapped,

00;09;48;25 - 00;10;00;02
Jeff Peterson
at the very end, we'll swap apartments for retail, and there's, there's like 80 pages of documents in there to get it all the way done, but it actually took it off of my balance sheet while it was being completed.

00;10;00;04 - 00;10;07;27
Jeff Peterson
So that was that was good. Wow. And that's how I actually got it to go past where where it was.

00;10;07;29 - 00;10;29;28
Craig Andrews
You know, there's a outdoor mall next to me that cost 192 million to build, and construction was complete, like 0708. And they couldn't get new loans, they couldn't get up, they couldn't convert the loans, and it just went into bankruptcy. They ended up selling the property for 75 million.

00;10;30;00 - 00;10;53;05
Jeff Peterson
Yeah. So so that's what happens a lot of times in these development deals. And I was telling this to a friend of mine just the other day, actually, it's usually the second developer that comes in and makes a killing. The first one can get burned. Right? So if if somebody comes in and you're the number two developer, you know, you're going to do well, it's the first guy that's already he's already spent every dime he's got.

00;10;53;05 - 00;11;11;15
Jeff Peterson
He's tapped out. He can't get the loans. Maybe the economy took a turn while he's under construction and everything dried up. A lot of times those are the guys who get burned. But usually the second one, all the infrastructure is in. Everything's nearing completion. He can step right in at a discounted price and and get it done.

00;11;11;15 - 00;11;12;19
Jeff Peterson
You see that happen a lot.

00;11;12;19 - 00;11;20;15
Jeff Peterson
I've never been in that position either way, fortunately. Well, I'd like to be in the second position, but I haven't had the first one yet, so.

00;11;20;17 - 00;11;31;10
Craig Andrews
But that's I mean, that's an interesting insight. I mean, would it be possible to structure business where your business model is? You're the second developer. You look for developments.

00;11;31;17 - 00;11;34;24
Jeff Peterson
It's called vultures are Us. Yeah. Oh, yeah.

00;11;34;24 - 00;11;43;15
Jeff Peterson
And that might even actually be a business. I don't know, I just made that up, but that's what it seemed like, right? I've, you know, way back in the day, I did some,

00;11;43;15 - 00;11;49;11
Jeff Peterson
foreclosures, like, would buy up foreclosures. And I have to tell you, I just I just didn't like it.

00;11;49;13 - 00;12;08;08
Jeff Peterson
I just it just it just didn't make you feel good at the end of the day, you know? So. And there's a need for it. There really is a need for it. And somebody is going to buy it. I just didn't like dealing. And so I, I just don't have that appetite now some big conglomerate. And you know, you're doing a multi-million dollar thing I guess that's fine.

00;12;08;08 - 00;12;10;24
Jeff Peterson
But small scale. I didn't want to do it.

00;12;10;26 - 00;12;34;01
Craig Andrews
Yeah. Wow. Okay. Well, you know, one of the things that fascinates me is real estate. And the one thing I know about myself is I know nothing about it. And, you know, when I moved to Greensborough, I bought a house. That was one light away from a neighborhood called Sedgefield, which is kind of a nice neighborhood, a very old, nice neighborhood.

00;12;34;01 - 00;12;36;27
Craig Andrews
And in Greensborough and,

00;12;36;27 - 00;12;44;27
Craig Andrews
that house today is worth about what I paid for it in 99, which was exactly. Yeah.

00;12;44;27 - 00;12;47;22
Craig Andrews
Maybe a few dollars more. And,

00;12;47;22 - 00;12;57;05
Craig Andrews
I always thought if I bought in Raleigh, I was going by around Lake Johnson. And the one thing I've seen as well, which for me, it looks like a lovely area right around this little lake.

00;12;57;05 - 00;13;02;18
Craig Andrews
But. Yeah, but it doesn't seem to have appreciated like other parts of Raleigh.

00;13;02;20 - 00;13;12;27
Jeff Peterson
You know, I see that too. Sometimes I'll look at something and go like, wow, this is gonna be worth $1 million. It's going to be worth going to be worth this. And then it never seems to quite take off.

00;13;12;27 - 00;13;17;18
Jeff Peterson
And I've seen that I'm trying to think of the example that, that I was thinking of like that.

00;13;17;18 - 00;13;23;20
Jeff Peterson
But, you know, people will say, well, what kind of property buy? What do you buy? I said, well, I buy the good, the bad. And,

00;13;23;20 - 00;13;34;23
Jeff Peterson
what in the world was I thinking when I got that? So I've done, I have I bought the bad two the stuff that you're like, oh my gosh. And when I say bad, it just doesn't really pay off.

00;13;34;23 - 00;13;59;06
Jeff Peterson
I haven't like got burned, burned. But I mean something that just languishes, like what you're talking about your house. And, it was in Greensboro. Was like, oh, you know, you just wait for years and years and years and it never really appreciates most property is going to appreciate over time. But if you're playing that game where you're going to, you know, quick flip properties and it's going to go up right away because something's coming in.

00;13;59;08 - 00;14;13;26
Jeff Peterson
I mean, it's a very dangerous game to play. I mean, you just you have to look long haul. I mean, I always that's what I do, I always look I always look at everything like it's going to what it's going to be in five years or ten years. Never thinking that I'm going to be able to flip it in a year or two years.

00;14;13;29 - 00;14;16;23
Jeff Peterson
So that's kind of the way I examine them.

00;14;16;25 - 00;14;18;03
Craig Andrews
Yeah.

00;14;18;06 - 00;14;20;11
Jeff Peterson
But even then I've been wrong. So yeah.

00;14;20;13 - 00;14;34;11
Craig Andrews
Well, and I guess that's kind of my question. It's because I see people killing it in real estate. Yeah. And one of my questions is have they figured out that I haven't? I'm interested in your take.

00;14;34;14 - 00;14;36;12
Jeff Peterson
How many have you done?

00;14;36;14 - 00;14;37;14
Craig Andrews
Oh not much.

00;14;37;14 - 00;14;44;29
Craig Andrews
And so I, I haven't played around because in my experience in Greensboro was so bad.

00;14;44;29 - 00;14;53;07
Craig Andrews
And then I moved here to Austin, and just pure dumb luck. I bought a house in there, and and,

00;14;53;07 - 00;14;59;23
Craig Andrews
a suburb of Austin that nobody had heard of. And now everybody knows it. Like, Seth Rogen lives right around the corner from me.

00;14;59;25 - 00;15;00;26
Craig Andrews
And,

00;15;00;26 - 00;15;02;28
Craig Andrews
this is just pure dumb luck.

00;15;02;28 - 00;15;08;09
Craig Andrews
This would make me look like a real estate genius. But I know to live is just dumb luck.

00;15;08;11 - 00;15;27;22
Jeff Peterson
Yeah, well, you know the old saying about real estate, right? So if you buy it today, you pay too much and you look like a schmuck, right? Or you just look ignorant. Five years from now, that same property, you're actually. You're okay. Ten years, you're looking smart. 20 years from now, you look like a genius, you know? So the the real key is you just have to wait it out.

00;15;27;25 - 00;15;43;15
Jeff Peterson
Most probably some property. Not. It doesn't work like that. But but most of the times property is forgiving. You know, real estate, if you pay a little bit too much, it's going to forgive you. But if you try to get out real quick, if you have to, you know, if you're looking at three years, don't don't do it.

00;15;43;15 - 00;15;51;08
Jeff Peterson
I mean, just just do something. Do everything for the long haul. So with me it's appreciation. But it's also about,

00;15;51;08 - 00;16;01;24
Jeff Peterson
if it will cash flow, if it if you can carry everything while you're waiting. So you don't want to be upside down on a property, it it with me. That was especially true especially

00;16;01;24 - 00;16;03;15
Jeff Peterson
when you're starting out and property.

00;16;03;21 - 00;16;23;07
Jeff Peterson
You can't start out trying to invest in speculation. So the example would be my Peterson station. Okay. If I had bought that when I first looked at it and I didn't have a trailer park on it. So you know what? In ten years this is going to be worth $1 million. I should buy this, but I would not have been able to afford to carry that note.

00;16;23;13 - 00;16;44;24
Jeff Peterson
I would have been strung out, just strung out, and wouldn't wouldn't be able to do anything else. So for me, being a small property investor, I had to make sure that everything kind of cash flowed early on, or at least broke even. And waited for the appreciation. And then, of course, you get you're getting your added benefits of all your depreciation and you know, everything else that comes with it.

00;16;44;26 - 00;17;00;29
Jeff Peterson
But if you can't do that to begin with, you're going to be in a world of hurt quick so that that's that's one thing that I've always tried to stay away from is just straight up speculation. And I've done at a time or two, and it's not worked as well. So.

00;17;01;01 - 00;17;03;28
Craig Andrews
You know, one of the things I've, I've thought was like,

00;17;03;28 - 00;17;18;23
Craig Andrews
I thought it would be interesting to buy either Mixed-Use or some office space just to have my office there so that as, as rents go up and what have you, I'm at least pegged down to a, you know, a low,

00;17;18;23 - 00;17;23;28
Craig Andrews
you know, a low cost. And I see there's a grocery store chain here in Austin or in central Texas.

00;17;23;28 - 00;17;33;27
Craig Andrews
They're based out of San Antonio called H-e-b, and they will buy the entire shopping center, and they become the landlord of all the

00;17;33;27 - 00;17;39;20
Craig Andrews
the other ones. Now, H-e-b have gotten bigger. So now they are the entire shopping center. But, you know,

00;17;39;20 - 00;17;45;16
Craig Andrews
a number of years ago, H-e-b would be like the anchor tenant in the shopping center and then have other people.

00;17;45;16 - 00;17;53;21
Craig Andrews
But they were also the landlord. And I thought, you know, in a competitive business like groceries, that probably helps because that keeps their,

00;17;53;21 - 00;18;00;08
Craig Andrews
their real estate cost relatively low, you know, as everything appreciates.

00;18;00;10 - 00;18;19;28
Jeff Peterson
Well, you actually, you actually touched on something that's very interesting. So that's how I do mine. Like I have a consignment store and a poster shop. Still. I still have their poster shop back from what, 45 years now? Gosh, it's hard to believe. But anyway, so I still have that. And it's downtown Carrie. But I bought the property way back, way back in the day.

00;18;19;28 - 00;18;21;09
Jeff Peterson
And when I bought it,

00;18;21;09 - 00;18;35;16
Jeff Peterson
yeah, it wasn't the first thing that I did, but it was a big project for me, and I bought enough of it so that I could rent out space in there. So actually, all of the tenants pay for all the space, and I rent to myself as well. So I do that in all the businesses that I have.

00;18;35;18 - 00;18;54;08
Jeff Peterson
I own the property and then I ran out spaces to other people. So I've got the, you know, guaranteed rental income and I'm saving myself like my business. I know it's going to make it even if it's not doing well, because I own the property and other people are paying the rent so that it works out really well.

00;18;54;10 - 00;19;04;27
Craig Andrews
So I've heard two schools of thought. One is give yourself a bargain on your your own rent and the other is charge your business fair market value for rent. Do you have a thought on that?

00;19;04;29 - 00;19;26;04
Jeff Peterson
I do, I charge fair market because if your business can't pay fair market, then what are you doing there? You're you're you're basically you're subsidizing your business with your property. So you charge the business a fair market rent. And if the business can't sustain that, then you're in the wrong business. So you may have to evict yourself more or less.

00;19;26;07 - 00;19;42;10
Jeff Peterson
But but seriously, you have to look at that. You have to look at it kind of straight up. I mean, now depending upon how the accounting works, you can cut yourself a deal or you can do something, but but you really have to do your internal bookwork to play it straight up to make sure that it's worth it.

00;19;42;10 - 00;19;45;07
Jeff Peterson
Even stay in that business. The example would be I have a,

00;19;45;07 - 00;19;48;24
Jeff Peterson
I have a salon in Jacksonville, which is a 40,

00;19;48;24 - 00;19;57;21
Jeff Peterson
40 booth salon. So it's a big salon, 8000ft, and it's inside my shopping center, and I charge them rent. I mean, I charge my self rent,

00;19;57;21 - 00;20;02;08
Jeff Peterson
and I actually overcharge the rent. But anyway, if that couldn't afford that rent, I couldn't stay there.

00;20;02;14 - 00;20;17;12
Jeff Peterson
Like, it would make sense. I'd rather get a regular tenant in there because, you know, I'm just. I'm hurting my property, so you can't hurt your property to help your business. You're just, you know, it's it's six of one, half a dozen of another, right? So that's kind of how I do it.

00;20;17;15 - 00;20;19;07
Craig Andrews
No. And I like that. I like that.

00;20;19;07 - 00;20;26;07
Jeff Peterson
And but the other part of that, the other part that I want to touch on. So if do you have office space now or you add your home or, you.

00;20;26;09 - 00;20;44;25
Craig Andrews
Know, I, I work mostly on my home and then there's a co-working space and my teams distributed. I, I kept hiring people and then they'd move away and I then went viral. Yeah. And so we end up it was my intention to have an office with the employees and,

00;20;44;25 - 00;20;48;08
Craig Andrews
and just the way life went, they kept moving away, and I didn't want firearms.

00;20;48;08 - 00;20;51;08
Craig Andrews
So we were both basically remote.

00;20;51;10 - 00;20;55;05
Jeff Peterson
Yeah, I can see that, especially Covid during the Covid times. Right?

00;20;55;08 - 00;20;58;20
Craig Andrews
Yeah. Thankfully I was out of that before Covid. And,

00;20;58;20 - 00;21;05;09
Craig Andrews
And it's yeah, it was nice to be out of that before Covid.

00;21;05;12 - 00;21;19;20
Jeff Peterson
Well, what you touched on before is if you had office space and you'd say you'd get more space in what you need and rented out to other, other people. Right. The positive part of that, the real positive part is when you go to the banks, you say, you say you want to,

00;21;19;20 - 00;21;25;16
Jeff Peterson
build a 20,000 square foot building and you're going to take 50% of that yourself and rent out the other 50%.

00;21;25;18 - 00;21;51;15
Jeff Peterson
Well, the banks love that. They love it if it's owner occupied. So if you go in there as your business and your business is a tenant, they're much more comfortable than if you're just speculative real estate. So that's in it. And they most banks say it's a 50%. So if you say you're 50% occupied with your business in there, they're much more likely to work with you on favorable terms.

00;21;51;15 - 00;22;05;21
Jeff Peterson
Terms. Everything's going to be a lot better. Really. That's a it's an added it's a really big added bonus. It's kind of like buying a house for yourself and then moving out of it and renting it out eventually. But you're going to get your best rates if you're if you move in it yourself first.

00;22;05;23 - 00;22;25;14
Craig Andrews
You know. So now one of the things you brought up, and I think this is a good time to kind of pivot to just, you know, the concept of business in general. And I thought you made a really good point that if your business can't afford the rents of the space sets and you've got a broken business and,

00;22;25;14 - 00;22;29;15
Craig Andrews
obviously you figured a lot of things out over the years.

00;22;29;17 - 00;22;31;06
Craig Andrews
What what were some of the hardest?

00;22;31;06 - 00;22;38;02
Craig Andrews
Let's start with the hard lessons. You know, the. Yeah, let's start with the embarrassing ones, and then we'll talk about the, the successes.

00;22;38;04 - 00;22;43;12
Jeff Peterson
We never talked about the embarrassments. Okay. Go ahead. I okay. I'm good.

00;22;43;14 - 00;22;44;22
Craig Andrews
Now, what was what were some,

00;22;44;22 - 00;22;47;28
Craig Andrews
what were some hard lessons that that you had to learn?

00;22;48;00 - 00;22;52;01
Jeff Peterson
Well, you know, so growing up, I worked, you know, like

00;22;52;01 - 00;23;04;15
Jeff Peterson
most people today that are entrepreneurs, if you if you talk to every one of them, I'll guarantee you every single person said from the time he was ten years old or 12 years old, he had a lawn cutting business. He had this. Yeah, that. You're just hustled. Right.

00;23;04;17 - 00;23;11;08
Jeff Peterson
And that was true of myself, too. So I did, you know, of course. And I did the Boy Scouts. I was an Eagle Scout. I did all that kind of stuff. But but,

00;23;11;08 - 00;23;17;03
Jeff Peterson
the hustling part, you know, working in tobacco and then working, you know,

00;23;17;03 - 00;23;20;16
Jeff Peterson
I was driving a school bus, so I. That's an interesting story. So it,

00;23;20;16 - 00;23;27;03
Jeff Peterson
back in the day in Richlands, the students were the school bus drivers.

00;23;27;05 - 00;23;48;03
Jeff Peterson
So which is interesting because you have your senior high school students driving a school bus of 75 kids, you know, K through eight or mine was K through eight. But, you drive school busses, which to me, that was the best job ever because you had to go to school, you got paid to drive it, you had to come home, you got paid to drive it.

00;23;48;05 - 00;24;06;04
Jeff Peterson
And so when you're getting paid, you get to miss the first half of the first period of school and you miss the last half of the last period of school. So you get out of some school, be in charge of 75 kids. That was a hard lesson. What was hard about that of the heart? It was great job, I loved it.

00;24;06;06 - 00;24;13;12
Jeff Peterson
The hard part is disciplining those kids. I mean keeping quiet and things you had to do. So when I did mine,

00;24;13;12 - 00;24;29;09
Jeff Peterson
most people got bus driver's license because everybody got a license. Like, everybody tried to get it right, but very few people got busses because there weren't that many busses. My sister was a bus driver before me, so she was a senior and didn't want to drive her bus anymore because of what she was doing.

00;24;29;12 - 00;24;45;28
Jeff Peterson
So I substitute 84. So at 16 years old I got my 16 years old on the day I got my driver's license, 16 plus three days. I got my bus driver's license and that's when I started driving the bus. So at 16, I was driving a school bus. Wow. Which,

00;24;45;28 - 00;24;48;21
Jeff Peterson
you know, if it was my kids riding the bus and I saw me, I would not let them go.

00;24;48;22 - 00;25;07;24
Jeff Peterson
I would not let them get on that bus. No, no. Who would? Right. But, you know, the the perfect driving record in the whole school. Nobody ever. There was no major incidents. The biggest incident for me was keeping that bus quiet when you pulled up. And there's some things I would I would do that wasn't quite as,

00;25;07;24 - 00;25;09;01
Jeff Peterson
mature as I am today.

00;25;09;08 - 00;25;11;05
Jeff Peterson
You know, I would.

00;25;11;07 - 00;25;12;04
Craig Andrews
But, you know.

00;25;12;06 - 00;25;27;18
Jeff Peterson
To keep them quiet, I would I would feather the gas pedal and it would buck the kids back and forth and made them fly over the seats, you know, just stupid stuff. But yeah. Yeah, I, I dodged that. But anyway, I won't regress into that. I could talk all day about being a bus driver, but,

00;25;27;18 - 00;25;32;06
Jeff Peterson
less fun was, was I at the time then to.

00;25;32;08 - 00;25;52;00
Jeff Peterson
So I was doing that to make money. And then I went to work for my parents, who had a small upholstery shop, and fairly quickly they were kind of on the downslide and they had lost their posters. So I was the only upholsterer. My mom was the same stores and she didn't know how to sew, and I didn't know how to holster.

00;25;52;03 - 00;25;53;11
Jeff Peterson
So that was,

00;25;53;11 - 00;26;02;04
Jeff Peterson
that was hard. That was really hard. Yeah, but I figured it out. Yeah. So.

00;26;02;07 - 00;26;08;21
Craig Andrews
Well, and, you know, it's interesting when you have no other choice but to figure it out. Seems like you do figure it out.

00;26;08;23 - 00;26;09;09
Jeff Peterson
You know,

00;26;09;09 - 00;26;14;12
Jeff Peterson
it was no more complicated than you'd put a sofa on.

00;26;14;12 - 00;26;27;21
Jeff Peterson
We call them horses or bucks, and you put it on there and say, okay, there's $600 sitting there. I didn't look at like there was a piece of furniture to Upholster I looked at it, there were $600 and we had to get that $600 to pay the bills.

00;26;27;25 - 00;26;32;22
Jeff Peterson
That was it. Yeah. So you had to figure it out. So that's what we did, no matter what.

00;26;32;24 - 00;26;34;22
Craig Andrews
So yeah.

00;26;34;23 - 00;26;39;00
Jeff Peterson
I wouldn't want to go back doing that again. So yeah. No.

00;26;39;02 - 00;26;45;10
Craig Andrews
No, I, I, you know, and I've, I've had that my own business where, you know, our, our first

00;26;45;10 - 00;26;58;27
Craig Andrews
our first engagement with everybody is something we call our first time offer, which is a stupidly cheap front end offer that's loaded with a ton of value, but it's like a coffee date to just kind of get know each other and figure out if we work well together.

00;26;58;29 - 00;27;02;07
Craig Andrews
And the the back end,

00;27;02;07 - 00;27;09;04
Craig Andrews
closing rate on down conversion rate on. That's 80%. And there have been days where I'm sitting there, I'm like, oh, I don't want to I don't want

00;27;09;04 - 00;27;18;13
Craig Andrews
the paperwork, you know, to to send the send because I, you know, promised him the same thought. I'm like, I would put a dollar figure to it

00;27;18;13 - 00;27;19;28
Craig Andrews
and multiply by 80%.

00;27;19;28 - 00;27;25;02
Craig Andrews
I'm like, that's how much money is sitting there. If I just get off my butt and spend the 2 or 3 hours.

00;27;25;03 - 00;27;46;27
Jeff Peterson
Doing the work. Yeah, that's how I look at it. I look at every single thing like that went up. It's it's the same, same thing. When something costs like, well, it only costs $100. No, we make $0.50 on that or. No, actually, you know, like some of the stuff, we make $0.20 on the dollar. So it doesn't cost you $100.

00;27;46;27 - 00;28;12;02
Jeff Peterson
It cost you $500, $500 in sales to pay for that item. Is it worth $500? Because that's what it's really costing you, right? It's not costing you a hundred. It's costing you 500. So that's what I that's how I kind of teach my children and teach the employees go like, okay, it's only $100. But if if we're only making $0.20 on the dollar, that means we have to make $500 to pay for that.

00;28;12;05 - 00;28;25;15
Jeff Peterson
Is that worth it? No. Okay, there you go. That's my answer. Yeah. So that's kind of the way you have to look at small business. I think you have to look at it like, what is the real cost? What is the true cost?

00;28;25;15 - 00;28;33;24
Jeff Peterson
So if you, if your cost to go to 80% on something or 50%, then you know, you're that's what it's really costing you double that.

00;28;33;27 - 00;28;45;29
Craig Andrews
Yeah. Well what other lessons would you share is as we kind of wrap up, what would be some final thoughts or wisdom that you've learned in your journey that you'd love to share with others?

00;28;46;02 - 00;28;46;18
Jeff Peterson
You know,

00;28;46;18 - 00;28;50;22
Jeff Peterson
well, real estate, of course, there's there's so many tidbits on that. I mean,

00;28;50;22 - 00;29;07;10
Jeff Peterson
if one thing I like to say and I don't think we've shared this or stepped on it, but if you're beginning or you're thinking about getting into the entrepreneurial journey, you're going to open up a business. Or maybe you work where you work for somebody else and you want to start branch out on your own, or you want to buy some real estate.

00;29;07;12 - 00;29;27;08
Jeff Peterson
The first thing you need to do if you're getting ready to quit your job, is to borrow every dollar you can while you have that job, right? Borrow. Borrow your money right now. Borrow against your house. Borrow against your credit cards. Get it. Get a lock. Get anything you can pick to open that business. You're dead to the banks.

00;29;27;10 - 00;29;48;27
Jeff Peterson
You're going to be dead for a couple of years because. Because you're going to need two good years of tax returns before you're going to be eligible to even borrow anything again. And that's to a good year. So it might take you 3 or 4 years. Right. So that's the biggest thing that you can do is, is make sure that you have tapped out everything you can while you have a W-2, or you know why you had a W-2.

00;29;48;27 - 00;29;56;06
Jeff Peterson
Because once you once you don't have that. It's a whole different game. Yeah. Very cool.

00;29;56;09 - 00;29;58;21
Craig Andrews
Well, that's that's fascinating.

00;29;58;21 - 00;30;04;22
Craig Andrews
Jeff, thanks for coming on. Leaders and Legacies. Your book is are we there yet? And,

00;30;04;22 - 00;30;08;01
Craig Andrews
people can get that on Amazon. How can people reach you?

00;30;08;03 - 00;30;10;07
Jeff Peterson
Well, they can reach me through my email,

00;30;10;07 - 00;30;26;04
Jeff Peterson
which is JMP 521 at aol.com. Maybe have show notes down there. I'm not I'm not sure. Find me on LinkedIn, just not the Minnesota Jeffrey Peterson, the other one. If you find me on LinkedIn or any social media, of course I'll be on there as well. But,

00;30;26;04 - 00;30;30;27
Jeff Peterson
if you if you look at my book on Amazon, then you can see how to contact me from there as well.

00;30;30;27 - 00;30;33;12
Jeff Peterson
I believe. So, yeah.

00;30;33;14 - 00;30;36;06
Craig Andrews
Well, excellent. Well, thanks for coming on Leaders and Legacies.

00;30;36;08 - 00;30;39;26
Jeff Peterson
I enjoyed it. Greg Joy talking with you.

00;30;39;26 - 00;31;06;22
Craig Andrews
This is Craig Andrews. I want to thank you for listening to the Leaders and Legacies podcast. We're looking for leaders to share how they're making the impact beyond themselves. If that's you, please go to Ally's for me.com/guest and sign up there. If you got something out of this interview, we would love you to share this

00;31;06;22 - 00;31;08;17
Craig Andrews
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00;31;08;19 - 00;31;31;29
Craig Andrews
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00;31;32;01 - 00;31;40;06
Craig Andrews
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00;31;40;06 - 00;33;42;11
Craig Andrews
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